Colocation – a 2007 forecast?

I received an email update from Tim Anker the other day who runs the colocationexchange in London. Tim originally worked for Band-x in London, one of the very first bandwidth exchanges set up in the late 1990s. When Band-x decided to divest itself of its colocation exchange activities, Tim acquired the assets and the new venture opened its doors in September 2004.

Tim sent out his usual annual update that starts with the words:

We were also very conscious of the fact that the UK market in particular had reached a worrying impasse, one which we didn’t wish to comment on without first careful consideration of the situation. So nothing like a bit of a lull over the Christmas period to provide the ideal chance for such processes, so please find our thoughts and comments below.

One of Tim’s comments when reviewing 2006 was:

“I think it’s fair to say the impact this merger has had on the pan-European colocation industry has been profound to say the least and certainly accelerated the belief that this is very much a sellers market these days, in sharp contrast to the years prior to 2005.”

I think this is a classic case of British understatement, as certain post-acquisition colos, tripled, if not quadroupled their prices, in 2006 as they sought to focus on attracting corporate datacentre business rather than small hosters.

Following his review of 2006 he provided his predictions for 2007:

So, for 2007, what shall we go for?:

  • Expect to see more facilities open – hot markets being London, Paris and Dublin
  • In London in particular we still expect new facilities to open outside of the M25
  • With regards pricing the trend will still be up in general
  • New entrants – yes, not just new facilities but new entrants as well. We don’t believe the changes in fortunes for the industry are going unnoticed and as we did five years ago, we are seeing a wide range of interested parties.

Anyway, Tim is your man if you have any questions about the UK colocation business and if you contact him through their web site I’m sure he’ll send you the full update by email.

By the way, if you need to know what’s going on in the datacentre world on a regular basis, there is another very useful monthly newsletter issued by BroadGroup called, surprisingly, Data Centres News and you can sign up to receive it here.

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